BullionVault Review

What BullionVault offers to gold investors

BullionVault is an award-winning precious metals trading platform, which enables individuals to buy and sell physical gold and silver. Private investors can trade through BullionVault gold and silver bullion, which is stored on their behalf by an independent vault operator. Investors acquire outright ownership of their precious metals holdings and have a delivery option. The gold and silver holdings are regularly inspected and audited, the respective reports are published.

Investors also have the option to buy gold on a regular basis similar to a savings plan.

About BullionVault

Headquarters

London, United Kingdom

Founded

2003

Employees

ca. 31

Number of clients

ca. 45,000

Assets

US$ 1.4 billion in gold; total precious metals holdings and currencies of about US$ 2.2 billion

BullionVault was founded in 2003. In 2005 BullionVault started offering vaulted gold for private investors over the Internet. Vaulted gold means physical gold, which is owned by an individual investor and professionally stored in high-security vaults. Customers can buy and sell gold through BullionVault’s Internet platform. BullionVault also offers customer support over the phone. In 2011 BullionVault began offering vaulted silver.

Investors acquire outright ownership of their gold and can choose between four different vaults in Zurich (Switzerland), London (United Kingdom), New York (United States), Singapore and Toronto (Canada). Customers can also choose multiple vaults and thereby diversify their gold holdings across multiple jurisdictions.

When buying gold with Bullion Vault, investors buy grams of standard bullion bars with a weight of approximately 400 ounces (ca. 12.5kg) as defined by the London Bullion Market Association. The LBMA is the professional association for the London gold market and sets the rules for standard bullion bars or what are known as good delivery bars.

Standard bullion bars are traded at very low premiums above the market value of their gold content and enable investors to purchase, sell and store gold at low costs.

BullionVault operates similar to a gold exchange for private investors: Customers can buy and sell or trade gold with other customers. BullionVault also functions as a market maker, i.e. they buy and sell gold to/from clients.

BullionVault introduced in March 2013 its Automatic Gold Investment Plan which allows investors to buy gold regularly at the prices set daily at the London fix. Once set-up, an investor can simply deposit money into its BullionVault account and the money will be used to purchase gold automatically. Investors do not need to place any orders or trade directly on BullionVault’s trading platform. An investor can set up a monthly automatic payment or standing order from his bank account to make regular deposits (e.g., every month) to his BullionVault account for the purchase of gold. The Automatic Gold Investment Plan differs form traditional savings plans in that investors are completely free to decide when and in what amount they make deposits into their account. They can adjust the frequency or amounts of their payments and stop making deposits at any time without any negative consequences. More about BullionVault’s Automatic Gold Investment Plan can be found on BullionVault’s website.

BullionVault was twice the winner of the Queen’s Award for Enterprise in the United Kingdom: In 2009 BullionVault has won the innovation award for enabling private investors to access the professional gold bullion market; in 2013 it won the Queen’s Award in the category of international trade.

In June 2010 the World Gold Council together with a technology fund whose main investor is the Rothschild Investment Trust (RIT Capital Partners) acquired an equity stake in BullionVaul. The World Gold Council is the market development organization for the gold industry. Its members are the leading gold mining companies with a combined market capitalization of more than US$ 200 billion.

Product details

Precious metals

Gold, silver

Minimum investment

1 gram of gold

Delivery of gold

Optional, separate fees apply (see below)

Vault locations

Zurich (Switzerland)

London (United Kingdom)

New York (United States)

Singapore

Toronto (Canada)

Currencies

Clients of BullionVault can trade gold in U.S. dollars, British pounds sterling and euros

BullionVault has a sophisticated safety and security concept. Both Bullion Vault and its independent storage operator LOOMIS (formerly Via Mat) as well as Brinks for storage of gold in Toronto and silver in Singapore are members of the of the London Bullion Market Association. LOOMIS and Brinks belong to the largest global vault operators and secure logistics companies.

BullionVault publishes the holdings of each of its investors daily. The investors’ total holdings are listed under online nicknames. The vault operators LOOMIS and Brinks send a daily bar list of the total BullionVault gold holdings which is then published on the BullionVault website.

The annual statements of BullionVault are audited by an accounting firm from the United Kingdom, and the gold bars in the vaults are inspected by an LBMA-accredited, independent inspection company.

BullionVault and LOOMIS/ Brinks have additional processes in place to increase the safety and security of their investors’ gold and silver. For example, the maximum daily withdrawal of gold from a LOOMIS vault is limited to 5% of the total gold holdings, and BullionVault must give 2 days notice of a bullion withdrawal to LOOMIS and publish the notice on the BullionVault website’s front page.

Withdrawal of gold is possible for clients of BullionVault, but additional fees apply (see costs of BullionVault below). For safety reasons, there are withdrawal restrictions on the transfer of funds. Normally, BullionVault only allows money to be returned to the bank from which the client’s BullionVault account was originally funded. There are exceptions, but these require additional security measures to ensure that money can only be transferred to the client and nobody else.

All buy and sell transactions of gold through the BullionVault platform are instantaneously settled, i.e. clients can only buy gold, when their accounts are funded. There is no settlement risk. BullionVault does not loan client gold to other investors without a written consent by the client.

The clients’ un-invested money is held at Lloyds TSB bank in a segregated and pooled trust account.

Every client has outright ownership of his/her amount of gold or silver. The gold becomes the client’s legal property. A potential default of BullionVault or LOOMIS/ Brinks cannot change this. The client would still own his/her gold. The finances of BullionVault are sound, and the World Gold Council is a strong investor in BullionVault.

Based on its review, Trustable Gold rates BullionVault as a trusted provider of vaulted gold and grants them our Trusted Provider Seal. More details on our rating methodology and the covered safety and security criteria can be found on our Trusted Provider Seal page.

Rating – Trustable Gold Safety Criteria

Outright Ownership of 100% Gold

Insured, independent storage

Transparent, external audit

Price transparency

Liquidity

Regulation

Trusted Provider Seal

Clients of Bullion Vault own their gold, it is their legal property

The gold is insured, the independent storage company is a member of the LBMA

4 grams of silver for free

New clients of BullionVault receive 4 grams of silver for free upon account registration.

Premium/mark-up for buying and selling gold

Typically less than 0.2% in each case (buying gold or selling gold)

Commission for buying and selling gold

Commission applies both for the purchase of gold and for the sale of gold:

The first US$ 75,000 of gold purchased in the year so far: 0.50%

the next US$ 750,000 of gold purchased in the year so far: 0.10%

all additional gold purchased in the year so far: 0.05%

The same commission structure applies for the sales of gold.

All commission tiers are calculated annually. The commission rates will reset to 0.5% on the anniversary of the client’s account registration each year.

Costs for storage and insurance

0.12% per year on gold, billed monthly and subject to a monthly minimum of US$4.

Withdrawal fee for delivery of gold

The withdrawal fee for whole good delivery gold bars (400 troy ounces) is 2.5% of value. For smaller amounts of gold a surcharge of 5.0% applies.

Withdrawal fees for funds

The potential cost of wiring funds direct to the clients’s bank is deducted from the amount withdrawn. The charge is $30 or the approximate foreign currency equivalent. Wire transfers in the European Union are free of transaction costs.

Automatic Gold Investment Plan

For BullionVault’s Automatic Gold Investment Plan special fees apply. BullionVault charges a transaction fee of 0.8% on buying and on selling gold at the daily price London Fix.

BullionVault’s ongoing charges for storage, including insurance, are as normal.

Further fees

Further fees, e.g. for SMS text message notifications of account transactions can be found on BullionVault’s website.

In order to buy gold or silver with BullionVault, investors have to perform the following steps:

1. Open an account online with BullionVault
Enter your data into the online registration form on the BullionVault website.

2. Deposit funds into your BullionVault account
Deposit funds into your BullionVault account. You can deposit funds in US Dollars, Pound Sterling or Euros. Funds can be wired directly to BullionVault client account at Lloyds TSB in the United Kingdom. Customers in the US, Germany, France or Italy can also deposit funds through Bank of America.

3. Buy gold or silver
You can place an order as soon as Bullion Vault receives your deposit.

4. Prove your identity
Validate your identity within two weeks of funding your account. You can validate your account online by providing a copy of your ID/ passport or driving licence and a copy of a statement from your linked bank-account. Alternatively, you can validate your identity by having a standard bank form stamped by your bank and sending it to BullionVault by post. You can fund your account and trade before you are validated.